What’s a “fuck-it list?” Why does every VC need a time-consuming hobby other than investing? Are there any benefits to in-person collaboration, or should we all move to Zuck’s metaverse? Does more wealth beget more assholery?

A core value at super{set} is passion. Life is too short to phone it in. We bring our authentic selves to work and give our employees the opportunity to do their best. Yes, this extends to the podcast, too - so Tom and Vivek bring their most authentic selves to the pod this episode with some hot takes as they call BULLSHIT.

Whether it’s VCs, remote work and productivity, or fetishizing the CEO - we got the takes in this episode. Listen to what’s on Tom and Vivek’s “fuck-it list.”

Speaker 1: Welcome to The Closed Session, How to Get Paid in Silicon Valley, with your host, Tom Chavez and Vivek Vaidya.

Tom Chavez: Welcome everybody to episode 10 of season three, Closed Session. My name is Tom.

Vivek Vaidya: And I'm Vivek Vaidya.

Tom: Wow. I can't believe it's been 10 episodes already.

Vivek: Yeah.

Tom: Good times, how they fly by.

Vivek: That's right.

Tom: Can we just say, we're here in the studio and just before kicking this off, we were trying to figure out should we put the headphones on so that we can hear ourselves and all of our glorious little tonalities? Vivek, you sound terrific right now.

Vivek: Oh, I know.

Tom: Because we decided to keep the headphones because we just look cooler.

Vivek: You think we look cooler.

Tom: I think you look really cool with headphones on.

Vivek: Okay.

Tom: And again, you're coming through full stereo.

Vivek: That's right.

Tom: All the notes, the highs, the lows.

Vivek: All the notes are coming through. How's the reverb?

Tom: It's good.

Vivek: Yeah?

Tom: Yeah. You sound good.

Vivek: Good.

Tom: Vivek, you sound good. Okay, I'm not going to do that either, maybe.

Vivek: Can we get back to the business of recording the episode, Tom?

Tom: Right. Well, let's get down to the episode. This time, as you can tell already, we want to chop it up a little bit this time. We've been so serious. You're such a serious person.

Vivek: For our listeners, Tom has been in one of his moods for the last two, maybe three weeks.

Tom: What? What is that about?

Vivek: Yeah, he has. Just look at his LinkedIn and you'll find out.

Tom: Oh, yeah. I see where you're going with this. I have been a little sporty late. I've just been deciding lately, as I get older, my bucket list gets shorter and my fuck it lists gets longer.

Vivek: I didn't realize there was such a thing as a fuck it lists.

Tom: There's a fuck it lists and it's getting longer, and that probably explains some of what... some of these little things I've been...

Vivek: So, are you chiseling away at your fuck it lists?

Tom: Yeah. Well...

Vivek: Yeah?

Tom: And that's what this session's about.

Vivek: All right, here we go then.

Tom: Right?

Vivek: Yeah.

Tom: Because you're so serious, every one of these topics, we have to come in and we have to talk very seriously about company building and product and teams and boards. But this time we just said, "You know what? Let's give ourselves the big piece of chicken."

Vivek: You just want to chop it up and say all sorts of things about all sorts of... I don't know what.

Tom: You're the one who wanted to go off. And I said, "Okay, let's do it."

Vivek: Okay.

Tom: So this episode is called Calling Bullshit.

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The VC Wealth-to-Work Ratio

Vivek: What's the first thing you want to call bullshit on, Tom? What's your favorite thing you want to rant on today? Let's actually cross one thing off your fuck it list. Here we go.

Tom: Okay. So, it's a topic I think that is on lots of people's minds. Look, you have these venture capitalists, God bless them, and as we've said in many of these podcasts, we've been very fortunate to work with a number of very intelligent, very helpful VCs. But I think we can all agree that in the history of capitalism, you've never had a profession with a wealth-to-work ratio as out of control as this one.

And what spurred this is we had a board meeting last week and one of our venture capitalists, who's a very esteemed fellow, actually flies in for the board meeting from Boston, okay, that's commitment and I mean, in a time when everyone's just showing up on Zoom, flies in and... Wait, wait, this is a board meeting in August where nobody else-

Vivek: In the middle of August.

Tom: In the middle of August. Who calls a board meeting in the middle of August? Well, hard-working entrepreneurs who don't know that it's August, and we're just working, working, working like we do. And so, we're not going to put this person on the spot by calling him out, because I don't know if he wants that, but we salute him because there aren't that many VCs who are going to come out for a board meeting in the middle of August. And actually, he made a point of telling us, what did he tell us?

Vivek: He said that, "Well, because no one is working and I am, I get access to deals that other people don't."

Tom: That's thing one.

Vivek: Just to your point, Tom, entrepreneurs don't realize, "Oh, it's August, so we don't have to work." Entrepreneurs are always working.

Tom: That's right. So he's working and he's looking for edge and he probably deserves all of the added benefit that he gets from showing up in August. I remember that he also said early on, he realized that this was a thing, this was a dynamic in his industry, and he wanted to be known as the VC who's going to show up in August.

But the whole point here, and this is the first thing that we're calling attention to, is my goodness, really? All of August? And wait, wait, you don't just take August off, all of November, and all of December. And the rest of the time... By the way, there's another prominent VC who... And this is anecdote, but apparently would coach younger VCs to, "If you're going to be a VC, you need to have a major, super time-consuming hobby."

Vivek: Wow. And it's because of all the free time they have?

Tom: That's right. You have to have free time. And there's actually a lot of wisdom in the advice. I know I'm talking out of both sides of my mouth here because a good VC shouldn't be helicoptering. And we talked about that in past podcasts as well, and good board members who are like VCs who are there when you need them and importantly not there when they're not needed. And that's I think the gist or I would conjecture, that's the central point behind the advice he's giving young VCs is don't be in places where you're not needed. And to that end, have a hobby that keeps you busy.

Vivek: Carpentry.

Tom: Carpentry, professional balloon blowing upper, you could be a elephant circus trainer. Lots of things.

Vivek: Knitting.

Tom: Knitting, which is what you like to do.

Vivek: That's right. See, I threw it in just for you.

Tom: That's so nice of you. For our listeners, when Vivek travels, he shows up at the airport, literally, and I'm not making this up, two and a half hours before the flight-

Vivek: It's two and a half hours now, huh?

Tom: ... opens up his little kit and just starts knitting darling socks like a medieval babushka, there just-

Vivek: That's why Tom doesn't have to buy any socks.

Tom: ... knitting in the airport. It's adorable. But anyway, so look, I mean, VCs, it's a great gig. It's a great, great gig. And I think that for the ones who have empathy for and understand that the entrepreneurs they're supporting are actually there busting rocks, bleeding, sweating, toiling to make these companies work, and I know good VCs understand that, but it makes an Albuquerque boy like me wonder sometimes like, "How sustainable is that, really?" What do you think about that?

Vivek: I don't know. I think it's an interesting question to consider because if you think about Gold Rush happened, management consultants happened, VCs happened, and now what?

Tom: Yeah. Well, see, I mean, look, markets are efficient, and to your point I remember, I think in the '80s, everybody want to be a management consultant, then you should fly around in fancy clothes and you get paid a lot of money to give people advice. And then everybody wanted... When I was graduating from college, everybody was headed to Wall Street. That was the thing to do.

And it strikes me that VCs, you have so many people trying to become VCs now. There's only so many of those roles. Yeah, it's grown and there's a lot of capital slushing around, so that can support more of those roles for other baby VCs who want to try to get in the boat and there's a rising supply of quality deals, but I conjecture that you don't have the same volume and velocity of quality deals in a way that's commensurate with all the VCs trying to get in and get that money. Markets are efficient. How long can it last? I wonder if it's the beginning of... If it's not a decline, at least a correction of some sort.

Vivek: Maybe. But if you think about it this way, if the number of VCs is increasing and the amount of capital that's coming into VC is also increasing and the number of people watching the movies, reading the books, and wanting to be entrepreneurs, that's increasing, then-

Tom: Yeah, it could be.

Vivek: ... the volume goes up, but quality will definitely suffer.

Tom: All of the non-linear dynamics that you just did in your head right there, ladies and gentlemen, that was real-time. You heard it. Now see, people can understand. I just show up at work and I point and grunt like a caveman and then Vivek does non-linear dynamics in his head to balance the system. Boom. Equilibrium point achieved. Bob's your uncle.

Vivek: Tom, I think you've had enough of this-

Tom: Should we just walk in the room?

Vivek: ... because our listeners will get tired.

Tom: Okay. Well, okay.

Vivek: They will get tired of just-

Tom: Well, let's keep them with us. Let's keep them with us and move on to number two.

Vivek: Yeah.

Tom: Should we move on to our number two topic?

Vivek: Let's move on to number two.

Tom: You want to kick us off?

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Productivity in the Remote Work Era

Vivek: I'll kick us off. So we've been working in this remote work phase, for what? Three years now?

Tom: Yeah. Who's counting?

Vivek: Who's counting? And I'll have to admit, before the pandemic, there were days when I just used to love working from home. There was stuff that needed to get built and I would lock myself in my office, crank some shit out.

Tom: You are extremely antisocial.

Vivek: I'm very antisocial.

Tom: So there's that, too. But go on.

Vivek: Yes, yes. But now there's this whole like... It's become like this debate, this, "Oh, is remote work good? If remote work is good, then in-office, in-person work is bad." Right?

Tom: Right. It's also categorical.

Vivek: Exactly. Extremely categorical.

Tom: Are you with us or you're with terrorists.

Vivek: Correct. Correct. So, what do you think about remote work, Tom?

Tom: Look, well, as you know, I hate remote work, and I think we've talked about this in the past, I never knew... You and I have taken these Myers-Briggs tests when we work with teams, and we sometimes ask people to do that. And you're an E, right? I'm a slight E.

Vivek: I'm a slight E.

Tom: Yeah. But I'm not an extreme E.

Vivek: Yeah.

Tom: I'm married to an extreme E. My wife is very, very social. During the pandemic, I realized, "Oh my God," and I'm stinky, I don't want to get all goofy on you right now, but I missed you. And I miss everybody that we... I realized I'm a lot more social than I knew.

So I hate the exclusively work from home idea. And I also will see, and I've also said I have some motivational bias because I just want to see people, but maybe I'm wrong. Other people are just fine staying at home in their hovels. But anyway, Spotify came out recently and it's announced with some fanfare while they announced this work from home policy. And lo and behold, their retention has gone through the roof.

Vivek: Or duh.

Tom: Duh, right? Of course, your retention's gone through the roof. How's your productivity? See, that's the question nobody's asking.

Vivek: Yeah. And I think, actually, one of the reasons why people don't ask that question is that they always assume that when you ask the productivity question, you're costing aspersions on whether people are working or not, because it's remote work.

Tom: That's right.

Vivek: Okay, that's not the case. People may be working very, very hard, but are you actually getting the results you want? Because of all of the negative externalities that come into play because of remote work. If you're not set up for it, communication, collaboration, all of that takes a hit. So people may be working very, very hard, but your productivity does end up suffering.

Tom: And as we've discovered for ourselves, there were a number of things that we could do when we're home working in our little silos. But we also hit this wall when it came to ideation formation, there were these things that we realized we just needed to sit or stand at a whiteboard and jam in real time to figure it out.

In fact, there was this recent article that came at in the Wall Street Journal reporting, some research that some Stanford and Columbia guys did. It turns out, and it was a broad longitudinal study that shows you can execute ideas remotely.

Vivek: Yes.

Tom: Creativity, new ideas, that's really hard to do remotely.

Vivek: Yes. And that's what we found.

Tom: Right.

Vivek: We found that to be the case for ourselves too. Because every time we have to talk about new company formation or new product conception for existing companies and whatnot, the conversations end up being way more productive and useful when we're in person.

Tom: So we're now in person Tuesdays, Thursdays, usually Tuesday, Wednesdays, Thursdays.

Vivek: Correct.

Tom: We have somebody, what smacks call the-

Vivek: The five-setter.

Tom: The five-setters. We have some people who love being in the office every day, and that's wonderful. But what we've discovered is like, listen, there's magic that happens on Tuesdays and Thursdays, Tuesdays, Wednesday, Thursdays. And it's unscheduled. You just have to have people standing around just kind of breathing the same oxygen, finishing each other's sentences, listening into random snippets as they unfurl during an average day. I don't know, man. So the rant here is just stop the categorical shit.

Vivek: Stop the categorical shit. Because we're also building an engineering team in India, not one, but now two companies.

Tom: Right.

Vivek: Right? So we're not sound like we don't embrace remote work or work from wherever you want. But we're saying, and there needs to be in-person... There are lots of benefits of in-person collaboration as well, which you just can't ignore.

Tom: It's a both end, got to find the goldilocks point.

Vivek: Yeah.

Tom: Should we move on?

Vivek: Let's move on.

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Obvious VC Advice

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Tom: Okay. So-

Vivek: About six months ago... No, not six months ago. Maybe four or five months ago. All this advice started pouring out because of the market, like recession is happening and VCs coming out and saying, "Tighten your belts and don't spend money in what... Duh." But some of that is also not the right kind of advice, no.

Tom: Right. So what Vek just asked is obvious VC advice, like you're saying, "Got to grow, sales, got to prioritize." And so, the latest obvious not so helpful advice is you got to tighten your belts. Well, and listen, we're proud of the fact...not-so-helpful By the way, we know of some companies, and I'm not casting aspersions here, but maybe I am.

Companies who spend money like drunken sailors on shore leave. And there's been a lot of that going on last couple years, right? We're proud of the fact that we're scrappy and he had nothing stupid, right? You've wanted an omelet chef and a personal sommelier and a makeup team in matching jumpsuits for a long time. And every single time you come and you say you want those things, what's the answer?

Vivek: You say no.

Tom: I say no, we're not going to do it. Okay. And you look sad right now.

Vivek: One day,.

Tom: For listeners who can't see, Vivek, he looks sad, but we're proud of the fact that we don't do that stuff. So in one of these contexts, right? We're sitting in a board meeting where there's a company that has 28 months of forward runway, 28 months with zero revenue to just cash from existing customers, assuming they signed out a new deal. 28 months.

And the really strong advice coming down the wire is you got to find way... In fact, somebody was suggesting, "Are there places we can cut here?"

Vivek: Cut.

Tom: Because you got to extend your runway right now. Maybe these folks know something that we don't know, but that just sounds like lunacy, right? There's this New Testament story where it's a parable that Jesus told where a father gives his sons bags of gold, one goes off and spends it stupidly. I remember one of them buries the bags of gold.

The father comes back from his trip and he asks his son, "What have you done?" And the one says, "Well father, you should be proud of me. I buried this bag of gold." And the father throws him out. And point being is you're supposed to have invested it. You're supposed to do something productive with it. So for me, when I hear about you got 28 months of cash, is there anything we can cut here? That sounds like bearing bags of gold. How about leaning forward? How about growing the company?

Vivek: But do it judiciously. Don't spend money like drunken sailor. Again, it's the same thing, the categorical thing, right? We were ranting about earlier. It's not one to the exclusion of the other. You can grow and do it in an organized manner, right? Don't be penny-wise, pound foolish. It's the other kind of way of thinking about this.

Tom: So, what cuts through this conversation, at least the last couple, is maybe we just don't like extremism and categorical Yeah. People.

Vivek: Yeah.

Tom: The truth is not always, but frequently, somewhere in the middle.

Vivek: Always.

Tom: So for any company builders listening, if you're getting advice that says, "Oh my God, comments are crashing earth, you got to bury your values of gold, duck and cover." Well, maybe, but if that's what you do with the capital that you've been given, then I don't see how... What about customers? What about revenue? Exactly. What about product you're supposed to

Vivek: Grow? Cause the thing is, if you're in a position right now where you have 28 months of runway, it means that some time ago, whenever you raised that money, you had a solid business plan that was scrutinized by VCs who gave you that money. You had plans to get revenue and all of that growth, et cetera. So that hasn't changed.

Tom: No.

Vivek: Your value proposition to businesses still hasn't changed. So, why do you want to cut anything?

Tom: Makes no sense. Makes no sense. All right. Our last one.

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Fetishizing the CEO

Vivek: Last one.

Tom: And this one's juicy.

Vivek: It is.

Tom: And this is where you get to really stick it to me.

Vivek: No, why would I ever do that, Tom?

Tom: Well, because this-

Vivek: I'm just very amused, for lack of a better word, at all of these. So Adam Neumann's latest company, as you know, has received a 350 million investment from in recent Horowitz, right? And everybody's up in arms about it. Here we go again, white boy, toxic culture, VCs, blah, blah, blah, blah, blah. That's just another instance of fetishizing the CEO.

Tom: And that's the beef here, is we're living in a time where so many fetishize and mythologize the CEO in a way that first is not consistent with reality. There are some great CEOs, but they're trumped up into something that is not proportionate to the achievements and circumstances at hand. But second, it's really corrosive and it borders on irresponsible right?

And look, I mean, CEOs, let's just say it. CEOs are just human beings trying to get a thing done. And a lot of them, again, do remarkable things and we salute them. So we're not playing a hate in over here. All right? But the beef is when CEOs are just allowed to run off and do irresponsible things, and we all look at them and say, "Well, that's, Elon doesn't want to buy Twitter anymore." Well, guess what? You signed a $44 billion deal and it's a legal contract. And we don't live in Russia or China where people can just abrogate contracts willy-nilly. You signed a contract.

Vivek: Yeah, you have to honor it.

Tom: You don't want to pay. You don't want to buy it, so you come up with this about fraud, come on. Come on.

Vivek: Show me the robots.

Tom: We're calling bullshit.

Vivek: We're calling bullshit.

Tom: Right?

Vivek: Yeah.

Tom: Look, I mean, there's also the whole data robot mess there with the secondary sales when companies now, where people knew that the growth is not happening, and bad things are about to unfold and the results are about to announce. And then you have insiders selling shares, that's irresponsible.

Vivek: It's irresponsible. And there are many examples of that recently, right? Quite a few examples of that in the recent past.

Tom: There's the tone-deafness of... Okay. I'm laying off 20% of my staff as I'm buying mansions and yachts and all this other stuff.

Vivek: Or we just raised money three months ago and now we're laying off 25% of our stuff. Who does that? Who does that? And they're given so much latitude. That's the beef, right? That's our beef. They're given so much latitude.

Tom: And it's not that they... We're saying to forget that. Don't give them the latitude, take in the task, okay?

Vivek: Yeah, exactly.

Tom: Like if you look at this picture and you say, "That ain't right." Just because everybody else around you say, "Well, but they're the CEO and their... What do we know?" No, no, no, no, no, no. You have a right to your expectation that CEOs like everybody else, be held to contracts, rule of law, social norms and expectations as to what's proper or improper. So yeah, I mean, this is the thing that backs us just a little bit where... And we remember, like this time because you've been at this, you're really old, you've been at this for a while.

Vivek: I'm not as old as Tom, by the way.

Tom: Whoa. Whoa.

Vivek:I'm just saying.

Tom: Why you got to be like that?

Vivek: Oh, why I got to be like that?

Tom: This is ageism.

Vivek: Oh, maybe.

Tom: No calling ages, I mean, this ageism, I don't like it. But no, I mean, there was this time where it didn't seem like there was this kind of heroism and this triumphalist thing in the air in Silicon Valley where CEOs were so on.

I do remember when I was a puppy and there was this picture of Tom Siebel when he's leaning into the photo with his hand on his chin or his chin on his hand, and he's looking like a superhero. And I remember thinking, "Well, that's kind of silly." But that was rare, right? I mean, yeah, Larry Ellison carrying around and flying his jet and carrying on. But it didn't seem like such an epidemic.

Vivek: It wasn't that-

Tom: Of assholary.

Vivek: It wasn't an epidemic, but it's always been there. Like Bill Gates, Steve Jobs, Larry Ellison, Tom Siebel, Zuckerberg even, right? It's always been there. I think it's become... The proportion has increased significantly now, and that is the other problem.

Tom: And maybe that Max Pap to the earlier point about how much money slushing around-

Vivek: Correct.

Tom: ... the wealth.

Vivek: Correct.

Tom: Maybe this is just... But of course, what do you expect? But yeah, this is a numbers game. And more wealth begets-

Vivek: More assholes.

Tom: ... more assholary.

Vivek: Maybe that could be a theorem.

Tom: Yeah?

Vivek: Yeah.

Tom: Let's find a whiteboard and throw a bunch of notation on it-

Vivek: That's right.

Tom: ... that we no longer understand. And then just prove it, and at the bottom right, just say QED-

Vivek: QED.

Tom: ... so that everybody knows we're right. See, that's some CEO shit right there too.

Vivek: Yeah. Just go make it happen.

Tom: Right. Or maybe we just find somebody on our team's like, "Look, we know we're right. Don't even have to prove it, you do the math. Do the math."

Vivek: Yeah. We just write the QED.

Tom: And then we just write.

Vivek: And we will then... Our names will appear first-

Tom: Right, right, right.

Vivek: ... in the proof after yours.

Tom: I love it. I love it. You are so full of good ideas-

Vivek: Yeah, I know.

Tom: ... it's crazy-

Vivek: I know.

Tom: ... it's nuts. Well, there we have it.

Vivek: There you have it.

Tom: This was a very different kind of session than the normal affair.

Vivek: Do you feel cathartic, Tom?

Tom: I have exercised the demons.

Vivek: Yeah?

Tom: Yeah.

Vivek: Okay, all right. Good.

Tom: I feel good. How do you feel?

Vivek: I feel great.

Tom: Right?

Vivek: Yeah.

Tom: You look, you have a sort of serenity.

Vivek: Is that right?

Tom: Certain calm on your face right now.

Vivek: Yeah.

Tom: Really. It's nice.

Vivek: I'm glad to hear you say that.

Tom: Okay. Well, we worked it all out. And if there are any listeners still with us-

Vivek: Yeah, exactly. Because this-

Tom: ... at this point-

Vivek: We thank you then.

Tom: We salute you, we thank you. And we promise Vivek will get his act together in the next session.

Vivek: We will come back with normal programming in the next episode.

Tom: All right.

Vivek: But thanks for bearing with us.

Tom: Thanks, everybody. That's a wrap.

Vivek: All right.

Tom: See you next time.

Vivek: Bye.

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